Christean v. Industrial Commission

• Decision Date: 14 July 1948
• Docket Number: 7034
• Citation: 196 P.2d 502,113 Utah 451
• Court: Utah Supreme Court
• Parties: CHRISTEAN et al. v. INDUSTRIAL COMMISSION et al

196 P.2d 502

113 Utah 451

CHRISTEAN et al. v. INDUSTRIAL COMMISSION et al

No. 7034

Supreme Court of Utah

July 14, 1948

Original proceeding under the Workmen's Compensation Act by Bonnie R. Christean, widow of Arthur Grant Christean, deceased employee, and by Arthur Grant Christean, Jr., and others minor children of deceased, opposed by the Industrial Commission of Utah and the California Western States Life Insurance Company, employer, and the Standard Surety Company insurance carrier, to review an order of the Industrial Commission denying compensation.

Order affirmed.

Dean E. Flanders, Willard Hanson, and Stewart M Hanson, all of Salt Lake City, for plaintiffs.

Grover A. Giles, Atty. Gen., and Ray Quinney &amp Nebeker, of Salt Lake City, for defendants.

Latimer, Justice. McDonough, C.J., and Pratt, J., concur. Wade, Justice (dissenting). Wolfe, Justice (dissenting).

OPINION

Latimer, Justice.

Action to review an order of the Industrial Commission denying compensation to petitioners for the reason that the deceased was not an employee of the defendant California Western States Life Insurance Company.

On the 16th day of June, 1943, deceased Arthur Christean, entered into two agency contracts with the California Western States Life Insurance Company. The first contract involved the relationship of the parties and their respective rights in connection with the sale of life insurance policies and the second dealt with their relationship and respective rights in the sale of accident and health policies.

Taking the terms of the contracts most favorable to the contention of the petitioners we find the accident and health contract providing: (1) That the agent, deceased, shall devote his best energies to the interests of the company in developing and maintaining its business in said territory; (2) that he shall promptly render such services as the company may require to effect the discharge of any claims presented by policyholders; (3) that he shall strictly comply with all written and printed instructions that may from time to time be communicated to him; and (4) that either party shall have the right to terminate the contract by giving to the other ten days' notice in writing of its or his desire so to do. The life contract provides: (1) That the agent shall endeavor to promote the interests of the company as provided in the contract; (2) that he will refrain from conduct which might adversely affect the business and good standing of the company; (3) that he will do no business for any other life insurance company without written consent of the company; (4) that he will not engage in any business other than that covered by the contract; and (5) that the contract can be terminated upon 30 days' written notice to the other party. In both contracts deceased's territory was limited to the state of Uah, but this territory could be limited or withdrawn and in both contracts payment for his services was on a commission basis.

The deceased commenced working for the insurance company on the same day the contracts were dated, and continued his services until April, 1944, when he was drafted into the armed services of the United States. Pursuant to an offer made in a letter from the company, deceased, on the 15th day of November, 1945, again commenced selling insurance. The terms and conditions under which he was to sell were those contained in the two contracts hereinbefore referred to, except as they may have been modified by the terms of the letter which will be hereinafter referred to.

On the 9th day of January, 1946, after having obtained some prospect cards from the files of the insurance company, deceased started on a trip to St. George, Utah, for the purpose of soliciting applications for insurance. While en route to his destination he was killed by reason of a collision between his car and a truck.

The contracts between the deceased and the insurance company had the usual clause restricting the rights of agents to bind the company and applications were not to be completed contracts until approved by the company. Both contracts provided that the deceased was entering into the contracts as an independent contractor and not otherwise. The life contract provided that the company could prescribe rules and regulations provided they did not interfere with the freedom of action of deceased. The accident contract merely provided he should comply with all written or published instructions. The contracts were silent as to the hours to be worked and as to the means of transportation to be used, but all expenses were to be borne by the agent.

On July 14, 1945, the insurance company wrote the deceased a letter expressing regret that he had not rejoined the sales force of the company and included in the letter was the following offer:

"* * * I will attempt to tell you what your deal would be in the event you decide to come back to us. The Company would pay you an out and out salary for three months of $ 150.00 per month in addition to your commissions. This would not be in the way of an advance or anything of the kind, just an out and out salary. Then they would be glad to advance you any additional amount that you would need to take care of your budget. This comes under the jurisdiction of the rehabilitation program for service men, and I personally think it is quite something." (Italics ours.)

The record indicates that the company had established a rehabilitation program for veterans and that it paid them $ 150 per month for three months which was not in any way connected with the selling of policies. To qualify for these monthly payments the returning salesman was required to take a refresher course. The record further indicates the deceased had completed the course but the full three months' pay had not expired at the time of his death, and had he lived he would have been entitled to the remaining payments.

There is only one question to be determined in this case. That is, was the deceased an employee of the insurance company at the time he met his death? However, this question must be divided into two parts: First, did the two original contracts and the method of operation thereunder create the status of master and servant; and second, if they did not, did the letter of November 15, 1945, together with the contracts and method of operation, create such a status?

It will clarify the opinion to first dispose of the second question. The Industrial Commission found that if the letter did in fact create the relationship of employer-employee, it was only for a limited purpose and the purpose had been served before the deceased departed on his last and fateful trip to St. George. This being a jurisdictional question, this court is required to examine the evidence to see whether it preponderates against the conclusions of the Commission. See Norris v. Ind. Comm., 90 Utah 256, 61 P. 2d 413.

In addition to the information contained in the letter hereinbefore quoted, the wife of the deceased testified that she had conversations with two officials of the insurance company regarding the deceased's return to the employment of the company as a salesman. The substance of these conversations was that the company was making some special arrangements for returning servicemen; that the deceased was to receive $ 150 per month for three months; that he was to be paid a commission on any sales made by him; that he was to take a refresher course known as "You, Incorporated;" and that the deceased would be required to show an interest in the work and to work every day.

Petitioner's evidence further shows that deceased reported to the office regularly every morning, during the time he was taking the course. That his wife made frequent telephone calls and up to the time deceased left for St. George, he was present in the office to answer the phone. That deceased was paid at the rate of $ 75 every 15 days. That during the month of December, 1945, and the first part of January, 1946, certain policies of insurance were sold by the deceased.

The evidence elicited from officers of the insurance company was substantially as follows: That the deceased was a returned veteran and was eligible to participate in a readjustment bonus; that the money was not an advance but an outright payment which need not be repaid; that the deceased was required to take a refresher course in "You, Incorporated," in order to receive the money; that deceased took the course, completed it on the 26th or 27th of December, 1945, and had no further duties to perform in connection with the rehabilitation program; that had the deceased lived he would have received the other payment on the readjustment program; and that deceased's trip to St. George was for the purpose of soliciting insurance and was not in connection with his duties under the readjustment program.

The preponderance of the evidence is in keeping with the finding made by the Commission. The evidence clearly established that the deceased was to be re-employed under the terms and conditions of the contracts of June 15, 1943, and that the payment of the $ 150 per month was intended as an inducement to deceased to return as an agent for the insurance company. If this letter did in fact create the relationship of employer-employee, it was for the limited purpose of requiring deceased to refresh his ideas on selling insurance, and the evidence preponderates in favor of the finding that deceased had completed his refresher course. An agent can be an employee for a limited purpose and an independent contractor for other purposes. If, as found by the Commission, the schooling and refresher course was severable from the duties imposed by the agency contracts, then when the schooling program was completed, the...